Last month, Blogger Support supposedly resolved the reported problem, and the volume of problem reports dropped significantly. The problem, however, has not been eliminated.
The problem with updating various accessory gadgets, initially reported several months ago, is still present in various Blogger blogs - though significantly reduced - following an improvement last month.

This blog has a total of 626 labels defined, in the various posts. If I want to spare my readers (slightly) from an excessively long list of labels, I can edit the list and selectively display only significant ones. I cannot display all significant ones, unfortunately. I currently have 501 of 626 labels selected for display.

If I edit my label list, in "Select labels to show", I can select any one of the remaining 125 labels. Having hit the tiny "Done" caption at the bottom left of the window, I am left with "Configure Labels". If I hit "Save", the earlier reported problem continues - the yellow "Saving ..." flag pops up, and the gadget hangs while saving.

If I hit Cancel, and edit the list again, I can de select any one label, and save the list, successfully - again with exactly 501 labels selected. Then adding any one label, and attempting to Save once more, the gadget will again hang. The bottom line is that I can selectively display 501 labels - and no more.

I have observed this problem in both Chrome and Firefox (V11 and V12) - and using both the Classic and New GUIs. With up to 501 labels selected, no problem. With any more than 501 labels selected - big problem. During the past month, after I first observed this problem, I added half a dozen new labels, to reach the current total of 626. The problem has limited me to 501 selected labels, consistently, regardless of the total number.

Dude, hit me with a comment!

I was unable to update my Labels Gadget - wanted to change from cloud to list. Couldn't do it. Decided to delete the gadget and re-add it. Which I did. The gadget shows up on my blog layout - but, more importantly, not on my blog. What to do?